CNA - Mitigating Risks of Special Purpose Acquisition Companies

Representing the sponsor of a “Special Purpose Acquisition Company” or “SPAC” poses unique risks to law firms. SPACs have been around for decades but recently have become an increasingly popular investment vehicle, leading some to call 2021 “the year of the SPAC.” In this article, we explain what SPACs are and why representing their sponsors may pose risks for law firms and lawyers. We also offer suggestions – based upon experience defending law firms against malpractice and other claims after investments have gone bad – for reducing risks to law firms representing SPAC sponsors. Whether firms represent SPACs or other investment sponsors, these suggestions may make claims less likely. They also may reduce the disruption, expense, and embarrassment if claims arise. Click here to read more.